Tourists Warned Over Travel Insurance Fraud

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    Holidaymakers were warned today they face higher insurance costs and possible prosecution if they are caught making fraudulent travel insurance claims.

    The Association of British Insurers said it detected 4,300 dishonest travel insurance claims worth £5 million during 2008.

    It warned that insurers and overseas police forces were becoming increasingly vigilant about insurance cheats, with details of fraudulent claims now kept on industry-wide databases used by insurers and other financial services firms.

    As a result, the group said anyone caught trying to cheat their insurer would face higher insurance costs and problems obtaining other cover, such as motor and house insurance.

    Details held about fraudulent claims may also impact on people’s credit rating, making it more difficult or expensive for them to borrow money, while they could also face being prosecuted.

    Nick Starling, the ABI’s director of general insurance and health, said: “Travel insurance is there to cover you if things go wrong, not to pay for the cost of your holiday.

    “The vast majority of claimants are honest, but the dishonest few are in for a nasty and expensive shock this summer.”

    The group said insurers would be on the look-out for potentially suspicious claims.

    These include last-minute losses, where items are stolen shortly before the holidaymaker returns home, leaving them with no time to report the theft to the police, as well as claims for high-value items, such as cameras and jewellery, where there is a lack of proof of the loss or theft.

    Fraudulent claims uncovered in the past include one traveller who claimed for “recovery expenses” after contracting malaria in West Africa, but it turned out the expenses related to services provided by the local brothel.

    A photographer was jailed for three months after fraudulently claiming for £8,000-worth of camera equipment allegedly damaged while on holiday, while a holidaymaker in Cyprus reporting an alleged theft was caught out when the resort police discovered the “stolen” items in her friend’s handbag.